Page 36 - RFU Annual Report 2015/2016

Financial Review
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Balance Sheet and Cash Flow 13 residential properties in the of the RFU’s affairs, and also in
Consolidated capital employed vicinity of Twickenham Stadium increasing the effectiveness and
increased by £38.7m, from £154.4m owned by the RFU have been efficiency of the business. To that
to £193.1m, principally due to the treated as investment properties end, the RFU has adopted certain
profit for the year of £4.7m, and the under FRS 102 and their market principles associated with best
sale of £36.6m of debentures from value has increased from £6.9m to practice in corporate governance.
the 2015 and 2016 series. This was £7.1m. The following statements describe
partially offset by the other income how these principles have been
arising from the re-measurement Debtors and prepayments due applied in the period under review.
of the net defined benefit pension within one year reduced by £30.2m,
obligation, plus related tax from £50.8m to £20.6m. This was The Board of Directors
components and the movement due to underlying trade debtors The Board’s powers are clearly
in non-controlling interests’ share being reduced by £10.6m, and the defined in the Rules of the RFU,
in the undistributed profits of fact that prior year debtors and particularly Rule 11. The Board has
subsidiary businesses of £0.2m. prepayments included £20.3m in defined procedures and the RFU’s
relation to RWC 2015. Rules also set out matters reserved
Intangible fixed assets consist of to the RFU Council for approval.
software and website development Creditors due within one year The Board consists of eight
costs as required under FRS reduced by £142.2m, from £181.8m Council members representing a
102. Additions of £2.4m relate to to £39.6m, as at 30 June 2015 there broad cross section of the rugby
continued work on englandrugby. was £140m attributable to England community, three executive
com and back office systems, Rugby 2015 deferred income and directors and three independent
while there were disposals with an tournament related accruals. non-executive directors. Consistent
original cost of £0.6m and net book with last year, and following the
value of £0.2m. Creditors due after one year adoption of the Rules effective
increased by £25.9m, from £47.3m from the AGM in July 2014, the
Tangible fixed assets, which to £73.2m, due to the drawdown of President is no longer a member
primarily comprise our investment £24.6m of the new five-year RBS of the Board. Other executive
in Twickenham Stadium, reduced £50m revolving credit facility, plus directors or individuals may be
by £3.2m, from £234.1m to £230.9m. the straight line increase in the present during the meetings to
Total capital expenditure of £12.2m obligation for the RFU to buy back ensure that the relevant knowledge
in the year included the final Compass Group PLC’s 40% share and expertise is brought to bear on
elements of the Stadium Upgrade in TEL in 2025 for £55m. decisions.
Project of £6.7m, excluding
retentions still held, ongoing Debentures increased by £36.6m, There is a clear division of
business as usual stadium capital from £148.2m to £184.8m, due to responsibility between the roles
of £2.9m, initial works on the East the planned, cyclical issue of 4,636 of the non-executive Chairman
Stand Project of £0.8m, and £1.8m 75-year debentures. and the Chief Executive, and all
of other IT hardware and purchases executive directors have agreed
by subsidiaries. Depreciation has Cash reduced in the year by job descriptions and limits of
remained the same as 2014/15 £44m, from £71.2m at 30 June authority. The Board meets at least
at £15.2m, while assets with an 2015 to £27.2m at 30 June 2016, six times each year and considers
original cost of £25.3m and net reflecting the settlement of all matters under its powers, which
book value of £0.2m were disposed RWC 2015 obligations, including include the development of the
of during the year. payments to World Rugby, while RFU’s Strategic Plan, allocation
£24.6m was drawn down from the of financial resources, monitoring
Investments held by the Injured RBS revolving credit facility and of the performance of the RFU’s
Players Foundation (IPF) remained £36.6m of debentures were sold. subsidiary and associated
at £7.1m. The Group’s on-going operations companies, and considering
continued to be strongly cash the recommendations of the
An investment of £1.3m was positive. Game Boards and the Standing
made on 1 July 2015 in acquiring Committees, whose responsibilities
a 10% shareholding in Rugby Corporate Governance relate to policy development. In the
International Marketing LLC, an The RFU has previously stated 2015/16 year the Board members
organisation set up to drive value that it aims to be managed to were as follows:
from the commercial rights of USA listed PLC standards, particularly
Rugby, the majority shareholder. regarding effective management Bill Beaumont CBE DL
The RFU rationale for this and corporate governance. The Chairman
investment was both to generate a Board of Directors (the Board) Jeff Blackett
diversified commercial return and, acknowledges the value of the Chairman of Governance Committee
more importantly, to support the principles of good governance Rob Briers
development of rugby in what as set out in the UK Corporate Council representative Lancashire
is the largest international Governance Code, both in Stephen Brown
sporting market. terms of ensuring integrity and RFU Chief Financial Officer
accountability in the management

Annual Report 2015/16